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UNITED STATES EX REL. BAILEY-LEWIS-WILLIAMS OF FLO

June 7, 1961

UNITED STATES of America to Use and Benefit of BAILEY-LEWIS-WILLIAMS OF FLORIDA, INC., Plaintiff,
v.
PETER KIEWIT SONS COMPANY OF CANADA LIMITED and Perini Limited, and Indemnity Insurance Company of North America, Defendants



The opinion of the court was delivered by: MATTHEWS

This is an action under the Miller Act, 40 U.S.C.A. 270a and 270b, wherein the 'use plaintiff' sues to recover $ 63,433.03 for painting, filling and taping work which plaintiff says it performed as subcontractor of the prime contractor, Peter Kiewit Sons Company of Canada Limited, on a certain building project of the United States. A contract was entered into on May 20, 1958, between the prime contractor and the United States for such building project consisting of the construction of family housing and other facilities at Goose Air Base, Goose Bay, Labrador, Canada. Pursuant to the Miller Act, the prime contractor as principal and the defendant, Indemnity Insurance Company of North America, as surety, executed a 'Payment Bond' to the United States. A condition of this bond is prompt payment 'to all persons supplying labor and material in the prosecution of the work provided for in said contract'. This suit is on the bond, and the only defendant served with process is the surety.

It is alleged by plaintiff that its work was accepted by the prime contractor and by the United States, that the last date upon which labor was supplied on the project was July 26, 1960, and that on October 10, 1960, by registered mail, plaintiff notified the prime contractor of its failure to pay plaintiff a balance of $ 63,433.03.

 The matter before the Court is a motion by the surety to dismiss the action.

 As ground of the motion to dismiss the surety asserts that the court lacks jurisdiction over the subject matter or lacks proper venue, or that the complaint fails to state a claim upon which relief can be granted, and that, in any event, the action should be dismissed on the basis of forum non conveniens.

 The surety further asserts that the complaint on its face shows that jurisdiction is claimed by virtue of the Miller Act and in addition that the work for which plaintiff is seeking payment was performed outside the United States and hence outside this judicial District whereas the Act expressly limits the right to sue thereunder to a suit in 'the United States District Court for any district in which the contract was to be performed and executed and not elsewhere'. *fn1"

 Consideration will first be given to the doctrine of forum non conveniens. Inquiry was made of counsel for the surety as to whether a suit on the bond is pending elsewhere, and as to what forum the surety would deem more convenient than this forum. The response was that no suit is pending elsewhere on the bond, that plaintiff should sue the prime contractor in the Canadian court where the work was performed and such contractor is located, that the claim 'would be thus properly litigated in a forum which is well versed with the laws that govern the amount and validity of the claim', and that 'once the claim has been reduced to judgment, then, if necessary, plaintiff could bring action upon this judgment against the surety wherever it can be found.' *fn2"

 Since two suits would be more circuitous than one and since the work was performed in Labrador and the prime contractor appears to be located elsewhere in Canada, and the principal office of the government agencies concerned with the subject contract are in this District and the surety is likewise in this District, it is not apparent that the procedure suggested by the surety would lead to a forum more convenient than this forum.

 Moreover, the contract between the United States and the prime contractor seems not to support the view of the surety that resort should be had to Canada. A provision numbered 32 in the contract entitled 'Governing Law' states:

 '(a) It is expressly understood and agreed that notwithstanding the status of the parties hereto or the place of execution of this contract, all matters relating to the interpretation of or arising, out of or in connection with the performance of this contract shall be governed by and determined in accordance with the laws of the United States of America. (Emphasis supplied.)

 '(b) It is agreed that no suit or other action shall be initiated by the contractor against the Government except in a United States Court of competent jurisdiction.' *fn3"

 The contention of the surety that the complaint should be dismissed because this judicial District is not one where the contract was to be performed and executed is a contention which the surety, if sued there, might make in each of the other judicial District of the United States. And if the surety were found and sued in Canada where the contract was to be performed and executed, it might then contend that the action should be dismissed because the Miller Act contemplates that suit be brought in a United States District Court, and no such court exists in Canada.

 Attention is now directed to Section 1 of the Miller Act, 40 U.S.C.A. 270a. It provides that before any contract, exceeding $ 2,000 in amount, for the construction of any public building or public work of the United States is awarded to any contractor, such contractor shall furnish to the United States a payment bond for the protection of all persons supplying labor and materials in the prosecution of the work provided for in the contract. In the instant case the contract is in the amount of $ 5,529,980 while the 'payment bond' is in the amount of $ 2,500,000. By this bond the prime contractor and the surety are jointly and severally bound.

 In subdivision (a) of Section 2 of the Miller Act, 40 U.S.C.A. 270b, it is stated:

 'Every person who has furnished labor or material in the prosecution of the work provided for in such contract, in respect of which a payment bond is furnished under section 270a of this title and who has not been paid in full therefor * * * shall have the right to sue on such payment bond for the amount, or the balance thereof, unpaid at the time of institution of such suit and to prosecute said ...


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